Crypto miners rally as Jane Street discloses major positions

Bitcoin mining stocks rose after Jane Street said it owns small stakes in Cipher Mining, Bitfarms, and Hut 8. The news on Thursday increased investors’ confidence in crypto mining.

Jane Street shared the news in a filing with the U.S. SEC and said the investments are passive and not meant to control the companies.

Jane Street discloses 5% ownership in Cipher Mining

Jane Street and its related companies said they now hold about 5% of Cipher Mining’s total stock (about 19.68 million shares). Of this amount, Jane Street Capital owns 0.2%, Jane Street Options owns 2.1%, and Jane Street Global Trading holds 2.7%. 

Jeremy Kahn, the official representative for all Jane Street companies, signed the filing, which was then submitted under Rule 13d-1(c). Investors follow this rule when they buy company shares solely as an investment, not to exert control or influence over the company.

Cipher Mining builds modern data centers that use high-powered computers to mine Bitcoin. Following Jane Street’s announcement, the company’s stock price increased by nearly 20% on Friday, reaching approximately $4.28. 

Just before Jane Street made this investment, Google announced that it had acquired a 5.4% stake in Cipher Mining in late September. Because both Google and Jane Street are now involved with Cipher Mining, Investors feel confident that the mining industry will expand.

Bitcoin miners extend rally as sector outperforms Bitcoin

After news spread that Jane Street had bought shares in several Bitcoin mining firms, investors began buying mining stocks, and the prices increased. A few Bitcoin miners had already gained between 8% and 13% by the end of Thursday. By the end of the day on Friday, Bitfarms (BITF) rose 10.68%, Cipher Mining (CIFR) climbed 19.73%, and Hut 8 Mining (HUT) increased 17.27%.

American Bitcoin Corp. also increased by 11.29%, IREN Limited gained 12.60%, and Hive Digital Technologies rose 17.77%. These numbers showed that investors were moving money into companies that build and operate Bitcoin mining facilities, rather than just buying Bitcoin itself.

Over the past year, large mining companies have invested in new and more powerful Bitcoin mining machines that use less electricity. They have also built bigger and more advanced data centers and negotiated cheaper electricity contracts to increase their profits. These upgrades keep miners profitable even when the price of Bitcoin is rising too slowly. 

At the same time, Bitcoin prices have remained high, which has restored investor confidence in the market. Over the past 12 months, Bitfarms increased by 131%, Hut 8 rose by 211%, and Bitcoin itself gained approximately 73%.

Experts say that investments by Jane Street and Google have sparked interest among traditional investors in the industry. Additionally, improvements in global energy prices and clearer government rules have allowed companies to save more money and increase their production. 

The U.S. government and regulators have also begun working on clearer rules that enable companies to operate more openly, rather than creating new barriers. Mining companies don’t need to be afraid of sudden regulatory changes anymore and can now attract more investments to plan for future growth.

On related developments, Chris Wright, the U.S. Secretary of Energy, recently proposed a new rule that would require the Federal Energy Regulatory Commission (FERC) to establish fair and efficient methods for facilities requiring more than 20 megawatts to connect directly to the bulk transmission system.

This is because the electricity demand has never been higher, primarily due to the proliferation of AI infrastructure and large-scale cryptocurrency mining activities. The Secretary’s letter states that these sectors, which are now among the most energy-intensive in the U.S., require explicit rulemaking to accommodate them.

Under the new rules, crypto mining companies and AI data centers can have their connections reviewed within 60 days, provided they cover the costs of upgrading the network. These companies usually have to wait a long time to connect to the U.S. grid.

According to analysts, this change will enable miners to get started more quickly, which will help the U.S. maintain its competitiveness globally. The plan indicates that the administration is supportive of both technology and cryptocurrency, aiming to foster economic growth by promoting innovative ideas and concepts.

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